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HISTORY
The Joint Declaration provides that the policies of the People's Republic of China regard- ing Hong Kong will be stipulated in a Basic Law of the Hong Kong Special Administra- tive Region. A drafting committee was established in June under the auspices of the National People's Congress of China, and 23 Hong Kong residents were appointed to the committee which has a total membership of 59. Following the committee's inaugural meeting in July, a 180-member consultative committee was set up in Hong Kong to act as a channel of liaison and communication between the drafting committee and the Hong Kong community. In October, the British Government published details of a draft Order in Council dealing with the status after June 30, 1997 of persons who at present are British Dependent Territories Citizens (BDTCs) by virtue of a connection with Hong Kong, and related issues. The draft Order in Council was aimed at implementing the provisions in the United Kingdom memorandum associated with the Joint Declaration.
A Place from Which to Trade
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Hong Kong's history has been one of material and social improvement; the expansion of city and towns by cutting into hillsides, reclaiming the land from the sea, and the building of homes, schools, hospitals and other forms of public facilities to meet the demands of the growing population.
Yet, in its early days, the territory was regarded as an uninviting prospect for settlement. The population of about 3 650 was scattered over 20 villages and hamlets and 2000 fishermen lived on board their boats in the harbour. Deficient in fertile land and water, and mountainous, Hong Kong possessed only one natural asset, a fine and sheltered anchorage. Largely the reason for the British presence that began in the 1840s, Victoria Harbour was strategically located on the trade routes of the Far East, and was soon to become the hub of a burgeoning entrepôt trade with China.
Hong Kong's development into a commercial centre began with its founding as a settlement under the British flag in 1841. At the end of the 18th century-the British dominated the foreign trade at Canton but found conditions unsatisfactory, mainly because of the conflicting viewpoints of two quite dissimilar civilisations.
The Chinese regarded themselves as the only civilised people and foreigners trading at Canton were subject to residential and other restrictions. Confined to the factory area, they were allowed to remain only for the trading season, during which they had to leave their families at Macau. They were forbidden to enter the city and to learn the Chinese language. Shipping dues were arbitrarily varied and generally much bickering resulted between the British and Chinese traders. Yet there was mutual trust and the spoken word alone was sufficient for even the largest transactions.
Trade had been in China's favour and silver flowed in until the growth of the opium trade - from 1800 onwards reversed this trend. The outflow of silver became more marked from 1834, after the East India Company lost its monopoly of the China trade, and the foreign free traders, hoping to get rich quickly, joined the lucrative opium trade which the Chinese had made illegal in 1799. This led to the appointment of Lin Ze-xu (Lin Tse-hsu) in March, 1839, as special Commissioner in Canton with orders to stamp out the opium trade. A week later he surrounded the foreign factories with troops, stopped food supplies and refused to allow anyone to leave until all stocks of opium had been surrendered and dealers and ships' masters had signed a bond not to import opium on pain of execution. Captain Charles Elliot, RN, the British Government's representative as Superintendent of Trade, was shut up with the rest and authorised the surrender of 20 283 chests of opium after a siege of six weeks.